• How professional services and contractor involvement can assist
owners in pre-project planning

T able

L in CP F orum E arly -B ird
Registration Closes Feb. 28
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The Leadership in Capital Projects (LinCP)
Forum is where the conversation begins,
as the best minds in the capital projects industry gather in an intimate setting for two
days of collaborative, informed discussion
about the challenges facing the industry,
from project planning and funding options
to selecting and procuring services, and,
most urgently, how we work together.
Be a part of a more robust and successful future. Join us as we re-imagine capital projects with an anticipatory mindset.
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1:45 p.m. Topic #2: Funding Options
ISSUES AND OBJECTIVES
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Understanding the funding process and how decisions are made
The public bonds process
Public-private partnerships - legalities/limitations for public entities in Texas; lessons learned
Bonds vs. PPP vs. other sources

The Institute for Public-Private Partnerships (IP3) reports that despite the worst financial crisis in generations, the US has seen
major transportation P3 deals close. These deals represent investment in new infrastructure with large amounts of construction
during initial project years. What’s more, these deals show that
P3 is here to stay and that it is gaining ground. These are not oneoff projects with obscure characteristics. These projects are targeted at basic infrastructure for metropolitan areas. They build
on previous trends in project delivery such as design-build and
represent an evolution in procurement and project financing.
For the complete article courtesy of IP3, click here.

The Austin American Statesman reports that the State of Texas
has hung a “Partners Wanted” sign on its vast amount of public
property. It is a message to developers and contractors that the
state — land-rich but cash-strapped — will accept unsolicited
proposals for public-private partnerships to construct and operate a wide array of facilities from offices to power generation
sites to medical buildings. P3 Projects may help to stretch the
budgets of government projects without raising taxes.
For the complete article courtesy of the Austin American
Statesman, click here. Access the Public-Private Partnership
Guidelines and the Facilities Master Plan Report here.

T hank Y ou

to our

N onprofit /G overnmental

and

C orporate M embers

Nonprofit/Governmental
Cypress-Fairbanks ISD • Sam Houston State University Physical Plant • Southwestern University • Texas A&M University
• Texas State University System • University of Houston Facilities Planning & Construction • University of North Texas

I-L in CP M ember F ocus
Roy J. Sprague, AIA, CSI, REFP
Assistant Superintendent of Facilities & Construction
Cypress-Fairbanks ISD
I-LinCP Founder and Executive Director,
Carol Warkoczewski, AIA, MSOLE interviewed new board member, Roy Sprague
about his experience at Cypress-Fairbanks
ISD, his advice for professional services
and contractors working collaboratively
on public projects, and industry goals that
I-LinCP members can advance.
CW: We are very happy to welcome you as
a new Board member to I-LinCP! CypressFairbanks ISD is in the Houston area. How
many schools are in the CFISD portfolio?
Are there also some other types of facilities
that are owned/operated by CFISD?
RS: We have a total of 84 campuses along
with numerous support facilities that total
over 15.5 million square feet. These facilities include four transportation centers,
two day care facilities, instruction support
center, maintenance/operation center,
food production center, recycling center,
and a distribution/warehouse center. We
also designed and constructed the Berry
Center that opened in 2006, which serves
as an educational support center that
contains a 9,800-seat arena, a 16,000-SF
conference center with banquet and
food service facilities, a 450-seat auditorium, an 11,000-seat stadium, and administration office spaces. The Berry Center is
a very unique facility that is one of the first
of its kind in the K-12 educational facilities market which serves our students and
community in many different ways. When
the facility is not being utilized for educational programs, the district rents the facility out to defray the operating cost of the
facility for such events as basketball tournaments, band programs, trade shows,
weddings, banquets, and various other
functions. We can conduct our own high
school graduations at the arena thereby
saving our district hundreds of thousands
of dollars annually.
CW: In your many years of project planning and delivery, what are a couple
of key stumbling blocks that you see on
projects that may be due to professional
services or contractor performance?

RS: The biggest key stumbling blocks that
occur on projects are effective communications; failure to listen to the owner; and a lack of understanding of the
needs and expectations of the owner.
Everyone believes they are very effective communicators, but the team can
always improve. I certainly believe that
technology has enhanced our project
planning and delivery methods, however, the teams have lost the ability to truly
communicate effectively face to face.
Instead, everyone wants to communicate using emails and text messages. We
have truly lost the art of having meaningful conversations.
CW: What key advice would you give to
A/E firms who would like to work on CFISD
projects?
BR: Our district has very high expectations
of our service providers for design and
engineering services. It is very important
to understand that we demand and expect excellence on our projects. It is truly
critical that A/E firms engage quickly to
learn how we operate and understand
our goals and project expectations. We
are a public entity and we do not have
the luxury of making mistakes on projects
since we are responsible for effectively
spending taxpayer dollars. We must deliver a quality product that must serve our
community for many years. The whole
purpose of our existence is to provide a
high quality learning environment that
will improve student achievement and
success. We are in the business of educating over 108,000 students and the facilities we design, construct, and operate
must support the ability to deliver quality
education to these students in the most
cost efficient and effective way possible.
CW: What key advice would you give to
contractors who would like to work on
CFISD projects?
RS: We expect our contractors to deliver
a high quality facility under budget and
on time that is well constructed with minimal or no warranty problems. The best

advice I can give to contractors is that
we expect them to honor and fulfill their
contractual obligations. My department
is responsible for ensuring that contractors providing construction services deliver a quality project and meet the contractual obligations they agreed to when
they executed their contract with the district. We demand a lot from our contractors because we only have one chance
to build a facility correctly so the students
we serve and who occupy our facilities
will be successful in their learning careers
while attending CFISD schools. A building
with construction quality problems and
defects does not provide a very conducive environment for our teachers and
students.
CW: Now, as you look into 2012-2013,
what would be one or two CFISD or industry goals that you think the I-LinCP organization could help advance?
RS: I believe that I-LinCP could continue
to help improve and advance the collaborative process required by all entities involved in the design and construction process to deliver successful capital
programs for owners like CFISD. I-LinCP
is a very collaborative organization that
has brought private and public owners,
architects, engineers, contractors and
other industry partners together in a very
non-threatening, collaborative environment so that capital programs can truly
be successful. It takes all parties working
together to achieve successful project
completion and I-LinCP is a wonderful opportunity for everyone to learn from each
other and communicate more effectively
to better understand the needs and challenges facing each other. Only then, can
a capital program be truly successful!

Page 4
I NSTITUTE FOR L EADERSHIP IN C APITAL P ROJECTS

Owner-Favorable Contracts For Design Services And Construction – Part I
by Randall R. Reaves, AIA, Esq.

A

n owner contemplating the construction of a new facility may be
surprised to learn that the Owner
is often the least protected of all the parties in many of the so-called standard
contracts (such as those written by the
American Institute of Architects) for architectural services and construction. A
strong contract for the owner will clarify
for all parties exactly what the rights,
obligations, and expectations are for
the owner, architect, and contractor. A
strong contract will serve as a useful tool
to prevent disputes later, and as a method of resolving those disputes when they
arise. Although owners are often inclined
to begin a business relationship on a
friendly basis by avoiding confrontation,
a robust negotiation of contract terms at
the outset, led by an expert consultant
or an attorney, will yield many benefits
in keeping the project on track. A good
contract need not be about unfairly shifting risk to the other party, but should be
about spelling out all the details to avoid
future misunderstandings and conflicts.
Part I of this article takes a look at contracting with architects.
After developing a detailed facility
program, the owner will usually be ready
to contract with an architect (or engineer) for the design of the facility. The
Architect will want to limit its liability for
errors and omissions, to avoid being too
tied to strict definitions of performance
and time, and to have an unfettered
right to payment. Most complaints from
owners about their contracts with architects involve misunderstandings about
deliverables, the right of the architect
to fees for additional services, use of the
drawings, and project cost overruns.
Following are some of the major issues
which should be addressed in forming
a contract with an architect along with
suggested approaches.

Responsibilities of the Parties
• Many contracts will permit the architect to rely completely on information
provided by the owner (or owner’s
consultants). This can lead to errors
in the work. To avoid misunderstanding, require the architect to notify the
owner in writing if any such informa-

tion is unsuitable, improper or inaccurate, and, most importantly, prevent
the architect from proceeding unless
the owner confirms in writing how it
wishes the architect to proceed.
• Many printed form contracts prevent
the owner from changing its project
budget, and require the owner to
name a representative with complete
decision-making authority. These requirements are often incompatible
with the structure of governance for
many owners. Specify limitations on
the authority of individuals, including
the specific dollar amount authority
given to specific employees and officers, and including which decisions
will have to be referred to an institution or organization’s board.
• The AIA contracts give the architect
certain rights with respect to the owner’s legal, insurance, and accounting
needs and services. The owner will
normally not want to agree with a
third party (the architect in this case)
about such services.

The Architect
The “standard of care” is the legal standard to which the architect will be held
if the architect is accused of negligence
in the performance of its duties. The

AIA contract will include the most basic
standard.
• If you have hired the architect because of its special skills or the special
nature of the project, consider requiring a higher standard of care. Also
make sure that the contract requires
the architect’s services and designs to
be “in accordance with all applicable
laws, codes, and regulations.”
• Include detailed lists of requirements
for each phase of the architect’s
services (schematic design, design
development, construction documents, bidding and negotiation, and
construction administration). For example, specify the scale of all of the
drawings, at what point outline specs
are developed, requirements for sections and elevations, what types of
engineering services are included,
and presentations before community
groups.
• For any significant project, always
require errors and omissions (professional malpractice) insurance from
the architect.

Drawings and Specifications
Many owners are surprised to learn that

CONTINUED ON PAGE 6

Page 5
I NSTITUTE FOR L EADERSHIP IN C APITAL P ROJECTS

CONTRACTS CONTINUED FROM PAGE 5
they do not own the drawings. When an
architect is terminated, the owner may
not have the right to use the drawings
to finish the project until the owner complies with the architect’s payment and
other demands under the contract, even
when the right to some payments is in dispute. Under the AIA contract, terminating the contract can actually terminate
the owner’s right to use the drawings.
• The owner should have the right to use
the drawings and specs unless it is in
default under the agreement in the
payment of an undisputed amount.
It is essential that the owner have
the right to hire a substitute architect
(without an adjudicated default by
the architect) with the substitute architect having the right to use the drawings and specs to finish the project.
• It is perfectly legitimate to negotiate a
provision which gives ownership of the
drawings and specs to the owner.

Changes in Services
An architect’s fees can significantly increase through claims from the architect
that it is due additional compensation
under the contract or by custom. Avoid
later confusion by prohibiting increases in
compensation for:
• “official interpretations” such as those
by building officials. Require the architect to meet all codes and regulations, including interpretations enforced by field inspectors.
• a change in procurement method,
such as from a hard bid to a negotiated price with the contractor.
• failure of performance by the contractor, unless additional services are
required by the architect to re-bid

or re-negotiate the contract, or the
original time frame is substantially exceeded.
• any work performed by the architect
for which a signed, written detailed
approval is not obtained in advance
from the owner.

Payments
Owners are often dismayed to learn that
the architect is due a payment even
when such payment puts the owner’s
position in jeopardy. Depending on the
circumstance, the owner should be able
to withhold a payment completely, or a
portion of a payment needed to cover
the problem. Contract with the architect
to give the owner the right to withhold
payment when:
• the architect is in breach or default
under the contract.
• any part of such payment is attributable
to services which were not performed
in accordance with the contract.
• the architect has failed to make payments promptly to its consultants for
services for which the owner has already paid the architect.
• the owner has paid the architect for
more of its services than have actually
been completed. For example, when
the owner has paid the architect 75
percent of its fee allocated for preparing the drawings, but the drawings are
only 50 percent complete.

Project Budgeting
The best course of action is to require
a real cost estimate (rather than mere
opinions) from the architect if a thirdparty consultant has not been engaged
specifically for that purpose. Consider requiring the architect to employ and pay
a recognized and specialized company,

acceptable to the owner, to prepare detailed construction cost estimates of the
construction project, in a form acceptable
to the owner, following the Construction
Specifications Institute (CSI) format. The
estimates are submitted with plans and
specifications when submitted for review
at the completion of the Design Development phase and at various stages of completion of the construction documents. The
owner has little recourse with the architect
for contractor prices which exceed the
budget unless interim cost estimates are
obtained and the contract requires corrective action from the architect.
• If a construction cost estimate at the
end of design development or construction documents indicate a cost
which exceeds the budget, then require the architect to revise the project scope or quality to lower the cost
below the owner’s budget without an
increase in fee.

Conclusion
By following the simple contracting
guidelines above, and by seeking the
advice of an expert consultant or attorney to negotiate and draft actual
contract terms, an owner can do much
to ensure a smoother relationship with
its architect, and to avoid unnecessary
expense and delay. In Part II of this article, we will look at how the owner can
protect itself during the construction
process with a thoughtful choice of contract terms and general conditions for
use with a contractor or construction
manager.
This article is provided for informational, educational, and discussion purposes only and
should never substitute for competent legal
advice for a specific project or contract.

I NSTITUTE FOR L EADERSHIP IN C APITAL P ROJECTS

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